HomeMy WebLinkAboutRES2023-120 Electric Rate TariffSponsored by: Sorensen
Public Hearing: November 13, 2023
Postponed: November 13,2023
Approved: December 18, 2023
CITY OF SEWARD, ALASKA
RESOLUTION 2023-120
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SEWARD,
ALASKA, AMENDING THE 2024 ELECTRIC RATES TARIFF TO
INCORPORATE RECOMMENDATIONS FROM THE 2023 RATE STUDY
TO SET ELECTRIC RATES AT A LEVEL TO MEET THE UTILITY'S
REVENUE REQUIREMENTS OVER THE NEXT THREE YEARS.
WHEREAS, the rate study was conducted by Mike Hubbard of The Financial Engineering
Company, an expert with 44 years of experience in electric ratemaking; and
WHEREAS, the rate adjustments recommended in the study are based upon a "cost of
service" allocation to the various customer classes and are designed to generate the revenues
needed to adequately operate the utility; and
WHEREAS, increasing customer rates is necessary because of expenses related to
deferred and ongoing maintenance, emerging technologies, future reliability and cybersecurity
standards, additional resources (staffing and/or consultants) to ensure safe and reliable operations,
rising inflation and other factors, including maintaining adequate cash flow; and
WHEREAS, public input on the proposed rates was received following a work session
with City Council on September 11, and this input was reviewed by The Financial Engineering
Company and adjustments to proposed rates were incorporated where practical; and
WHEREAS, the rate study recommends an increase of $0.06/kWh increase across all
customer classes beginning January 1, 2024; and
WHEREAS, this adjustment in rates will result in an overall increase of $36.00/month for
residential customers using an average of 600kWh/month; and
WHEREAS, this change to the 2024 Electric Tariff will continue to ensure fair and
equitable rates for all customers —where the "cost causer" is the "cost payer" —while also
safeguarding the financial health of the utility.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY
OF SEWARD, ALASKA, that:
Section 1. The City Council hereby authorizes amendments to the 2024 Electric Rates
Tariff based upon recommendations from The Financial Engineering Company.
Section 2. These tariff amendments will increase electric rates across all customer classes
by $0.06/kWh beginning January 1, 2024.
CITY OF SEWARD, ALASKA
RESOLUTION 2023-120
Page 2 of 2
Section 3. This resolution shall take effect ten (10) days upon adoption.
PASSED AND APPROVED by the City Council of the City of Seward, Alaska this 18th
day of December 2023.
THE CITY OF SEWARD, ALASKA
LLNY\C /fin
dW1'11�\ lX
Sue McClure, Mayor
AYES: Wells, Osenga, Crites, Barnwell, McClure
NOES: Finch, Calhoon
ABSENT: None
ABSTAIN: None
ATTEST:
Kris Peck
City Clerk
(City Seal)
OF SEiv''+.
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1
1
1
City Council Agenda Statement
Meeting Date: November 13, 2023
To: City Council
Through: Kat Sorensen, City Manager
From: Rob Montgomery, General Manager Electric Utility
Subject:
Resolution 2023-120: Amending The 2024 Electric Rates Tariff To Incorporate
Recommendations From The 2023 Rate Study To Set Electric Rates At A Level
To Meet The Utility's Revenue Requirements Over The Next Three Years
Background and justification:
The successful operation of an electric utility requires the ability to resolve several interrelated, yet
conflicting, goals. Central to these goals are rates. Set too high, and the utility risks losing load, or even
entire customers, to self -generation. But setting rates too low reduces the financial health of the utility or
runs the risk of not being able to keep up with maintenance and potential reliability issues. Low rates can
also lead to insufficient revenues for retaining key personnel or filling all staff positions.
Seward's electric utility is currently facing several financial challenges. The first is the payment of the
$10 million revenue bond that was taken out in 2022 to pay for deferred maintenance related to
infrastructure (Nash Road and substations). The utility begins paying the principal payment on the bond
in 2024, which is almost $1 million annually. The utility also has unbudgeted infrastructure work to
complete in the refurbishment of the Spring Creek Substation and several other capital projects on the
books over the next three years, including the replacement of old and deteriorating underground cable
serving residential areas such as Stoney Creek, Gateway/Dora Way, Old Mill, Nash Woods, and Questa
Woods. These projects are critical to providing these communities with reliable service.
Additionally, the utility must also meet forthcoming reliability and cybersecurity standards being set by
the state of Alaska; manage expenses related to deferred and ongoing maintenance; cope with the rising
costs of materials and supplies and inflation in general; ensure adequate cash flow related to debt service
coverage ratios and add necessary resources to adequately operate the utility moving forward.
Seward's rate study was conducted by Mike Hubbard of the Financial Engineering Company. Mr.
Hubbard is an expert with 44 years of experience in ratemaking.
The recommended adjustments in rates are based upon a "cost of service" allocation, meaning the "cost
causer" is the "cost payer."
City Council conducted a work session on the rate study on September 11, and input was received from
the public during the session. Some adjustments to Mr. Hubbard's study (outlined below) were made,
where practical, based on Council and public feedback. While these changes lowered the overall target
margin, labor costs and the contribution to the Major Repair and Replacement Fund (MRRF), one
expense was also added to the study that was not known until after the work session. This was an expense
related to shared right-of-way maintenance with Chugach Electric for the line between Cooper Landing
and Moose Pass.
Below are the updates made to the study following the September 11 work session:
1. Decreased the rate study's target margin from $500,000 to $300,000, which aligns with the utility's
target margin established in the 2021 rate study.
2. Decreased the rate study's MRRF contribution from $500,000 to $350,000.
3. Decreased the rate study's labor expenses on the proposed organizational chart from $835,000 to
$675,000. This reduction was the result of eliminating the Apprentice Operator position and combining
the Government/Railbelt Relations Coordinator and the Customer Relation -Communications
Coordinator into one job.
4. Increased the rate study $700,000 total ($400,000 in 2024 and $300,000 in 2026) to maintain the
transmission line right-of-way between Chugach Electric's Dave's Creek Substation near Cooper
Landing to Seward Electric's Lawing Substation near Moose Pass. Seward owns the high -voltage
transmission lines and poles within the right-of-way and CEA owns the lower voltage distribution lines
attached to the same poles.
The 2023 Rate Study recommends an increase in rates of $0.06 across all customer classes beginning
January 1, 2024. This adjustment to Seward's rates will result in an overall increase of $36.00/month for
residential customers using an average of 600kWh/month.
Comprehensive and Strategic Plan Consistency Information
This legislation is consistent with (citation listed):
Comprehensive Plan:
Strategic Plan:
Other:
Total amount of funds listed in this legislation: $
This legislation (V):
Creates revenue in the amount of:
Creates expenditure in amount of: $
Creates a savings in the amount of: $
Has no fiscal impact
Funds are (✓):
Budgeted Line item(s):
Not budgeted
Not applicable
$ $10,612,704 in 2024
Affected Fund (✓):
General
Boat Harbor
Motor Pool
SMIC
Parking
Other
Electric
Water
Wastewater
Healthcare
Note: amounts are unaudited
Available Fund Balance
Attorney
Signature:
Not Comments:
applicable
Yes
Finance Director Signature:
.e r ....I
Administration Recommendation
Adopt Resolution
Other:
Cost of Service/Rate Study
Seward Electric System
September 24, 2023
the Financial Engineering Company
Modifications from September 11
Presentation
• Labor expense increases reduced from $835,000 to $675,000/year
• MRRF contribution reduced from $500,000 to $350,000/year
• Target Margin reduced from $500,000 to $300,000
• Note: Since both MRRF and Margin reduced, further reductions not
recommended
• Transmission Expenses
• Chugach has indicated that SES will now be responsible for its share of costs
of clearing Daves Creek to Lawing Substations
• Estimated costs are $400,000 in 2024 and $300,000 (plus inflation) in 2026
Revenue
Requirements
2022 2023 Adjustment 2023 2024 2025 2026
Budget Budget
Transmission Ops
Labor and Benefits 49,078 78,600 78,600 127,039 130,215 133,471
Other 826,700 512,500 - 512,500 620,090 225,592 546,420
Subtotal 875,778 591,100 - 591,100 747,129 355,807 679,891
Distribution O&M
Labor and Benefits 69,268 81,745 - 81,745 132,122 135,425 138,811
Other 33,825 30,000 - 30,000 32,710 33,528 34,366
Subtotal 103,093 111,745 111,745 164,833 168,954 173,177
Wholesale Power Costs 5,922,950 6,101,000 (6,101,000) - - - -
Work Orders
Labor and Benefits 229,684 108,050 - 108,050 174,639 179,004 183,480
Other (105,025) - - - (53,825) (55,171) (56,550)
Subtotal 124,659 108,050 108,050 120,813 123,834 126,929
General Operations
Labor and Benefits 1,728,560 1,314,716 - 1,314,716 2,124,943 2,178,066 2,232,518
Gen Fund Admin Fee 1,005,612 1,035,780 - 1,035,780 1,035,780 1,035,780 1,035,780
PILT - - 1,000,000 1,000,000 1,025,000 1,050,625 1,076,891
Major Repair/Repl Fund 350,000 358,750 367,719
Depreciation 2,560,132 1,585,000 - 1,550,591 1,839,582 1,934,631 1,714,826
Other 2,115,881 1,688,550 (185,000) 1,503,550 1,714,562 1,755,955 1,798,383
Subtotal 7,410,185 5,624,046 815,000 6,404,637 8,089,866 8,313,807 8,226,117
Administration
Labor and Benefits 415,129 354,996 - 354,996 573,771 588,115 602,818
Other 462,665 161,950 161,950 181,363 184,868 188,460
Subtotal 877,794 516,946 - 516,946 755,134 772,983 791,278
Debt Service
Interest Expense 154,450 586,700 - 586,700 579,700 722,525 702,789
Principal Payments 19,000 200,000 (200,000)
Other 20,903 25,403 23,916 23,916 23,916 23,916
Subtotal 194,353 812,103 (200,000) 610,616 603,616 746,441 726,705
Other Operating Expenses (Revenu (65,275) (63,719) - (63,719) (64,497) (64,497) (64,497)
Non -Operating Expenses (Revenue (49,100) (117,541) - (117,541) (104,191) (104,191) (104,191)
Target Margin - - - 300,000 300,000 300,000 300,000
Revenue Requirements
Prior Revenue Requirements
Increase (Reduction)
15,394,437 13,683,730 (5,486,000) 8,461,834 10,612,704 10,613,138 10,855,410
8,661,834 10,845,823 11,257,085 11,195,267
(200,000) (233,119) (643,947) (339,857)
3
Adequacy of
Existing Rates
• Scenario 1 (Keep Utility)
• Rate increase of
$0.060/kWh right away
• Additional increase of
$0.003/kWh in 2026
• Scenario 2 (Sell Utility)
• Requires rate increase of
$0.021/kWh (approval
of sale will take uptoa
year)
Current Analysis
Revenues at Existing Rates
Reven ue Requirements
Surplus (Deficiency)
Required Increase ($/k\Nh)
From Existing Rates
From Previous Year
Previous Analysis
Revenues at Existing Rates
Reven ue Requirements
Surplus (Deficiency)
Required Increase ($/kWh)
From Existing Rates
From Previous Year
2023
2024
2025
2026
7,302,086 7,341,469 7,380,948 7,380,948
8,461,834 10, 612,704 10,613,138 10,855,410
(1,159,747) (3,271,235) (3,232,190) (3,474,462)
0.021
0.021
0,060
0,038
0,059
(0 001)
0.063
0.004
7,302,086 7,341,469 7,380,948 7,380,948
8,661,834 10,845,823 11,257,085 11,195,267
(1,359,747) (3,504,354) (3,876,137) (3,814,319)
0.025
0.025
0,064
0,039
0,071
0.069
0.007 (0.001)
Residential Sm Gen Svc Boat Harbor Lg Gen Svc Industrial
Allocated Cost of Service
Street
Lights
Total
Energy $ 1,643 $ 911 $ 195 $ 2,007 $ 979 $ 7 $ 5,742
Demand 1,688,081 1,287,731 256,841 3,554,981 1,679,333 18,958 8,485,925
Customer 1,541,833 424,163 20,515 58,558 2,225 4,436 2,051,730
Direct - 29,455 - 39,853 69,307
Total $ 3,231,557 $ 1,712,805 $ 307,006 $ 3,615,546 $ 1,682,537 $ 63,253 $ 10,612,704
Revenues From Existing Rates
Customer $ 553,097 $ 290,685 $ 14,059 $ 41,974 $ 3,600 $ - $ 903,415
Energy 1,599,325 968,151 205,992 1,042,473 400,296 - 4,216,237
Demand - - 1,451,554 693,157 - 2,144,710
Street/Yard Lights - - - 77,106 77,106
Total $ 2,152,422 $ 1,258,836 $ 220,052 $ 2,536,001 $ 1,097,053 $ 77,106 $ 7,341,469
Surplus (Deficiency) $ (1,079,135) $ (453,969) $ (86,954) $ (1,079,545) $ (585,484) $ 13,853 $ (3,271,235)
Required Adjustment
Percentage 50.1% 36.1% 39.5% 42.6% 53.4% -18.0% 44.6%
S/kWh 0.069 0.052 0.020 0.056 0.063 0.000 0.060
5
Residential Stu Gen Svc Boat Harbor Lg Gen Svc Industrial
Allocated Cost of Service
Street
Lights
Total
Energy $ 879 $ 487 $ 105 $ 1,074 $ 524 $ 4 $ 3,073
Demand 1,346,818 1,026,815 205,181 2,834,219 1,338,973 15,144 6,767,150
Customer 1,235,777 339,966 16,443 46,910 1,781 3,555 1,644,431
Direct - - 17,833 - - 29,347 47,180
Total $ 2,583,473 $ 1,367,268 $ 239,561 $ 2,882,203 $ 1,341,278 $ 48,050 $ 8,461,834
Revenues From Existing Rates
Customer $ 553,097 $ 290,685 $ 14,059 $ 41,974 $ 3,600 $ - $ 903,415
Energy 1,599,325 968,151 205,992 1,042,473 391,501 - 4,207,441
Demand - - - 1,451,554 662,570 - 2,114,124
Street/Yard Lights - - - - - 77,106 77,106
Total $ 2,152,422 $ 1,258,836 $ 220,052 $ 2,536,001 $ 1,057,671 $ 77,106 $ 7,302,086
Surplus (Deficiency) $ (431,052) $ (108,433) $ (19,509) $ (346,202) $ (283,608) $ 29,056 $ (1,159,747)
Required Adjustment
Percentage 20.0% 8.6% 8.9% 13.7% 26.8% -37.7% 15.9%
S/kWh 0.027 0.012 0.004 0.018 0.030 0.000 0.021
6
Considerations
• $1 million in revenue requirements equates to $O.018/kWh
• Target margin of $300,000 used in analysis
• Need to have rates based on some margin to provide for capital
improvements and unforeseen costs
• Payment In Lieu of Taxes (PILT)
• Is the $1 million used in the analysis reasonable (if lowered, City would have
to make up the difference from other sources)
• Administrative Fee
• Is the $1,035,780 budgeted amount reasonable (as with PILT, City would have
to make up the difference from other sources)
Options —Scenario 1
• Option 1: Increase all rates by $0.055/kWh followed by $0.004/kWh
increase beginning of both 2025 and 2026
• Results in all revenue requirements met but with very small margins in 2024
• NOT Recommended
• Option 2: Increase all rates by $0.059/kWh followed by $0.004/kWh
beginning of 2026
• Results in margins of approximately $269,000, slightly less than the $300,000 target
• Option 3: Increase all by $0.060/kWh
• Residential rate class moves to within 92 percent of cost of service
• Option 4: Implement rate increases that move each class closer to cost of
service while attempting to lessen the large increase to Residential
• See following table
Options — Scenario 1 (continued)
• Rate adjustment should be implemented as soon as possible
• During 2024, investigate whether adjustments to the PILT and
Administrative Fee are warranted
• Rate adjustment at beginning of 2025 would be reflective of those
investigations
Boat Harbor
Option Residential Sm Gen Svc Lg Gen Svc Industrial
(28 meters)
Street
Lights
Total
Scenario 1 - Utility Retention
1,1 Increase all by $0.055/kWh
Increase ($/kWh) $ 0.055 $ 0.055 $ 0.055 $ 0.055 $ 0.055 $ 0.055
Added Revenues $ 864,170 $ 479,020 $ 102,716 $ 1,055,618 $ 514,876 $ 3,723 $ 3,020,123
SES Margins
Avg Monthly Increase $ 34.53 $ 69.57 $ 308.46 $ 1,112.35 $ 14,302.11 $ 51.71
Percent of Cost of Service 93% 101% 105% 99% 96%
1,2 Increase all by $0.059/kWh
Increase ($/kWh) $ 0.059 $ 0.059 $ 0.059 $ 0.059 $ 0.059 $ 0.059
Added Revenues $ 927,018 $ 513,858 $ 110,186 $ 1,132,390 $ 552,321 $ 3,994 $ 3,239,768
SES Margins
Avg Monthly Increase $ 37.04 $ 74.63 $ 330.89 $ 1,193.25 $ 15,342.26 $ 55.47
Percent of Cost of Service 95% 103% 108% 101% 98%
1,3 Increase all by $0.06/kWh
Increase ($/kWh) $ 0.060 $ 0.060 $ 0.060 $ 0.060 $ 0.060 $ 0.060
Added Revenues $ 942,730 $ 522,568 $ 112,054 $ 1,151,583 $ 561,683 $ 4,062 $ 3,294,680
SES Margins
Avg Monthly Increase $ 37.67 $ 75.90 $ 336.50 $ 1,213.47 $ 15,602.30 $ 56.41
Percent of Cost of Service 96% 104% 108% 102% 99%
1,4 Move to Cost of Service
Increase ($/kWh) $ 0.065 $ 0.060 $ 0.050 $ 0.055 $ 0.060 $ 0.060
Added Revenues $ 1,021,291 $ 522,568 $ 93,378 $ 1,055,618 $ 561,683 $ 4,062 $ 3,258,600
SES Margins
Avg Monthly Increase $ 40.81 $ 75.90 $ 280.42 $ 1,112.35 $ 15,602.30 $ 56.41
Percent of Cost of Service
$ 48,888
$ 268,533
$ 323,445
$ 287,365
98% 104% 102% 99% 99%
Options —Scenario 2
• It is recommended that the required $O.021/kWh increase be
implemented across the board (to all rate classes)
• Reductions in the target margin should NOT be considered since
approval process of utility sale will take up to a year
Boat Harbor
Option Residential Sm Gen Svc Lg Gen Svc Industrial
(28 meters)
Street
Lights
Total
Scenario 2 - Utility Sale
2.1 Increase all by $/kWh
Increase ($/kWh) $ 0.021 $ 0,021 $ 0.021 $ 0,021 $ 0.021 $ 0,021
Added Revenues $ 329,956 $ 182,899 $ 39,219 $ 403,054 $ 196,589 $ 1,422 $ 1,153,138
SES Margins
Avg Monthly Increase $ 13.18 $ 26.56 $ 117.77 $ 424.71 $ 5,460.81 $ 19.74
Percent of Cost of Service
96% 105% 108% 102% 94%
$ 332,773
Monthly Impact on Residential Customers
Summer
Customer Charge
Energy
CO PA
Total
Percent Increase (Tota
Winter
Customer Charge
Energy
CO PA
Total
Percent Increase (Tota
Annual
Customer Charge
Energy
CO PA
Total
Percent Increase (Tota
Average
kWh/month
Existing Rates
(Monthly
Charge)
Scenario 1: Retain Utility
Scenario 2: Sell Utility
Option 1.1
(Not Recommended)
Option 1.2
❑ption 1.3
Option 1.4
Option 2.1
Monthly
Increase
Charge
$ 22.10 $ -
81.48 11.99
60.24 -
Monthly
Charge
Increase
Monthly
Charge
Increase
Monthly
Charge
Increase
Monthly
Charge
Increase
571
$ 22.10
69.49
60.24
$ 22.10 $ -
100.90 31.41
60.24 -
$ 22.10 $ -
103.18 33.69
60.24 -
$ 22.10 $ -
103.75 34.26
60.24 -
$ 22.10 $ -
106.61 37.12
60.24 -
$ 151.83
$ 183.24 $ 31.41
$ 185.52 $ 33.69
$ 186.09 $ 34.26
$ 188.95 $ 37.12
$ 163.82 $ 11.99
I Bill)
21%
22%
23%
24%
8%
685
$ 22.10
$ 22.10 $ -
$ 22.10 $ -
$ 22.10 $ -
$ 22.10 $ -
$ 22.10 $ -
58.29
95.97 37.68
98.71 40.42
99.39 41.10
102.82 44.53
72.68 14.39
72.27
72.27 -
72.27 -
72.27 -
72.27 -
72.27 -
$ 152.66
$ 190.34 $ 37.68
$ 193,08 $ 40,42
$ 193.76 $ 41.10
$ 197.19 $ 44.53
$ 167.05 $ 14.39
I Bill)
25%
26%
2796
29%
9%
628
$ 22.10
$ 22.10 $ -
$ 22.10 $ -
$ 22.10 $ -
$ 22.10 $ -
$ 22.10 $ -
63.89
98.43 34.54
100.94 37.05
101.57 37.68
104.71 40.82
77.08 13.19
66.25
66.25 -
66.25 -
66.25 -
66.25 -
66.25 -
$ 152.25
$ 186.79 $ 34.54
$ 189.30 $ 37.05
$ 189.93 $ 37.68
$ 193.07 $ 40.82
$ 165.43 $ 13.19
I Bill)
2396
24%
25%
27%
9%
COPA equal to that recovered by SFS on July 1, 2023. Chugach has filed fora rate increase, and the projected increase to 5E5 would be approximately 6.5%.
13
Summary
• Analysis shows Residential and Industrial farthest from allocated cost of
service
• If utility is retained
• A series of rate increases must be implemented that total approximately
$0.071/kWh by the beginning of 2025
• This equates to an increase of $44.59/month for the average Residential customer
• Increases might be mitigated by reducing PILT or Administrative Fee (although any
reductions would have to be made up from other sources)
• If the utility is sold
• Rates still need to be increased by $0.025/kWh
• This equates to an increase of $15.70/month for the average Residential customer
• Approval process can take up to a year
• Presumably the capital improvements included in Scenario 1 ("Retain Utility") would
have to be performed by the acquiring utility (not included in the analysis)
Electric Rates &
Charges 2024
ELECTRIC RATES & CHARGES
RATES FOR ELECTRICAL POWER BY CLASS OF SERVICE
Class of Service
Seward Utility
Charge
/kWh
Demand Charge
/kWh **
Customer Charge
Cost of Power
Adjustment
(COPA)
Residential
Summer *
Winter
Base Rate
$0.1817
$0.1451
N/A
N/A
$22 10
Monthly cost adjustment
passed directly to Seward
by Chugach Electric
Association (CEA),
based upon CEA's cost
of power
Small General
Service
(less than 25 kW)
Summer *
Base Rate
$0.1869
$0.1527
N/A
N/A
$42.22
See explanation above
Winter
Boat Harbor
(less than 25 kW)
$0.1703
N/A
$42.22
See explanation above
Large General
Service
$0.1361
(1" 200 kWh/kW)
$0.0864
(Additional kWh)
$26.93
$44.23
See explanation above
Industrial ***
$0.1037
$30.00
$100.00
See explanation above
Yard Lights
N/A
N/A
$9.94 (175 watts)
$14.75 (250 watts)
$28.09 (400 watts)
$70.21 (1000 watts)
LED equivalent is
'h of cost
N/A
Metered Street
Lights
$0.2064
N/A
$44.23
N/A
Cost of Power Adjustment (COPA) is based on the cost of energy and demand from Chugach Electric Association (CEA)
and will change when there is an adjustment to CEA rates charged to the City of Seward.
* Summer is defined to mean the period from April 15 through October 15, with Winter defined as the remainder of the
year.
** Demand Charges will be based on the maximum demand recorded over a 15-minute period.
*** ASLC Transition Industrial Rate - The Special Contract for utility service with the Alaska SeaLife Center (ASLC)
terminates on December 31, 2021. As of January 1, 2022, ASLC will be an Industrial customer. However, ASLC will
transition to the regular Industrial rate over a three-year period. The transitional Industrial rate applicable to ASLC for
2022, 2023, and 2024, are set forth below, with ASLC subject to regular Industrial rates as of 2025.
2022
2023
2024
Customer
$100.00
$100.00
$100.00
Energy
$0.0377
$0.0397
$0.1037
Demand
$20.50
$23.67
$26.83
The Large General Service rate will be applicable to all services with a demand of 25 kilowatts or greater forthree or
more consecutive months during a year.
A Small General Service customer may elect to be billed under the Large General Service schedule. However, the
election to change the billing rate from one customer group to another may not be made more often than once every
12 months.
The Industrial rate will be applicable to all services with energy usage equal to or greater than 1 million kWh/year.
Definitions and Miscellaneous Charges
System Delivery Charge: A System Delivery Charge (SDC) of $28.75 will be applied to any service thatuses less than
150 kWh/month, whether or not electric service is used. This replaces the Seward Utility energy charge and the Cost
of Power Adjustment and is subject to proration. SDC under this schedule is an addition to the customer charge and is
based on a monthly usage of 150 kWh times the energy rate andthe COPA. Absent an active customer, the registered
property owner will be billed this monthly minimum charge.
Cost of Power Adjustment (COPA): The Cost of Power adjustment charge from the Power Provider is a direct pass -
through of the monthly total Power bill, including fuel costs, energy charges, customer charges, demand charges, and other
miscellaneous adjustments, prorated according to the number of kilowatt hours the Seward Electrical Utility customers
consumed during the billing period. The monthly rate for COPA may be modified as frequently as monthly, or through
the use of a balancing account intended to reduce rate fluctuations.
Seward Fuel Adjustment: The Seward Fuel Adjustment cost may be included in the COPA in the event The City
operates the standby generation plant, including fuel, labor, maintenance and repair when the cost exceeds the amount
budgeted. The cost will be prorated according to the number of kWh the customers consumed during the billing period.
VAR Change (Power Factor Adjustment): All schedules requiring demand metering will be subject to the following power
factor adjustment provisions:
1. Demand -metered customer should attempt to maintain a unity power factor. If the power factor falls below
ninety percent lagging, the customer will take corrective steps to return the power factor to ninety percent or
higher. Also, the following charge for billed kilowatts will apply:
Monthly Billing Demand = Maximum Demand x 90%
Actual Power Factor
2. All power factor adjustment equipment installed by the customer must be approved by the city. Power factor can
be determined by permanently installed monitoring equipment or by periodic testing at reasonable intervals, at the
discretion of the City.
Standby Generation: The cost of operating the standby generation plant to meet a specific customer's need will be charged
directly to that customer. Such cost will be the total cost of operating the plant, including fuel, labor, overtime,
maintenance, repair and overhead, less the value of energy generated in excess of customer's need.
Other Miscellaneous Fees and Charges: Fees and charges for existing facilities can be found on the following pages,
as well as engineering service fees and charges for new facilities. Fees are listed according to service zones as follows:
ZONE 1 Inside City Limits (excluding the Boat Harbor)
ZONE II City limits to Mile 12 Seward Highway, and all roads connecting to the
highway within this area
ZONE III Mile 12 to Lawing
APUCRegulatory Cost Charge: A special surcharge of $0.000626/kWh imposed on electrical utilities by the Regulatory
Commission of Alaska (RCA) in response to the state's intent to assess user fees to support activities of the RCA and
departments. This charge was recommended by the RCA as a pass -through charge to retail utilities customers.
Alternative Power Rebate: Calculated by subtracting kWh generated by an alternative power source from the
kWh supplied to the customer from the City of Seward during the billing cycle. The difference is multiplied by
the City's utility/energy charge and the Cost of Power Adjustment (COPA), which are itemized and shown on
the bill.
Alternative Power Excess Credit: If a customer's alternative power source generates more kWh than supplied
from the City of Seward during the billing cycle, the difference is credited to the customer's account at the non -
firm avoided cost rate (dollars per kilowatt-hour) of the City's Electric Department. The non -firm avoided cost
rate for Seward is defined as those expenses equal to the variable cost per kilowatt-hour for purchased power
during the billing cycle —adjusted upward by X percent* to account for line losses. Credits are not provided for
capacity.
The variable cost of purchased power for Seward is equal to the sum of the base energy rate (BER) and the
purchased power & fuel (PP&F) cost as set by Seward's wholesale power supplier.
Electric Reliability Organization (ERO) Charge: This charge supports the state mandated Railbelt Reliability
Council (RRC) which was approved as the Electric Reliability Organization (ERO) by the Regulatory
Commission of Alaska in September of 2022. The City Seward is subject to this charge through state statute. The
primary mission of the RRC is to ensure grid reliability by developing and enforcing technically sound reliability
standards, reducing long-term costs through grid -wide resource planning, and designing consistent
interconnection protocols for grid users. The ERO Surcharge is based on monthly kWh usage.
*The percentage used for line losses will be updated annually based on the previous year's line loss rate and
rounded to the nearest half percentage point
EXISTING FACILITIES
SCHEDULE OF FEES AND CHARGES
Service
Zone I
Zone II
Zone III
Meter testing
Per test, when results determined meter is accurate
$75.75
$106.06
$136.33
Reconnection to approved existing meter installation
$30.30
$37.88
$45.46
Reconnection to approved existing meter installation outside regular
business hours
$212.11
$257.52
$302.98
New connection fee
$221.14
$221.14
$221.14
Minimum deposit - Residential account
$121.54
$121.54
$121.54
Minimum deposit - Commercial or Industrial account
$243.09
$243.09
$243.09
Deposit - Interruptible, Off-peak account
The larger
of twice
the
estimated
bill or
$243.09
The larger
of twice
the
estimated
bill or
$243.09
The larger
of twice
the
estimated
bill or
$243.09
Tampering with or unauthorized breaking of meter seal
$737.06
$737.06
$737.06
Per annum interest on delinquent account
10.5%
10.5%
10.5%
Door hanger fee
$35.10
$35.10
$35.10
Monthly late fee on delinquent account
$6.33
$6.33
$6.33
Dishonored check fee
$39.59
$39.59
$39.59
Seasonal turn -on or seasonal turn-off fee
(excludes brand new service; includes new account name or same
account name; waived if < 2 months between turn-off and turn -on)
$156.50
each
$156.50
each
$172.17
each
Reconnection during regular business hours following disconnection of
delinquent account
$57.32
$71.69
$86.03
Reconnection outside regular business hours following disconnection of
delinquent account
$200.74
$243.72
$287.79
Transmission rate
$7.90/kW
per month
$7.90kW
per month
$7.90/kW
per month
NEW FACILITIES
ENGINEERING SERVICES
SCHEDULE OF FEES AND CHARGES
Service
Zone I
Zone II
Zone III
Temporary secondary service
$73.71
$88.46
$103.20
Primary overhead extensions — Residential
$73.71
$88.46
$103.20
Primary underground extensions — Residential
$73.71
$88.46
$103.20
Secondary service
$73.71
$88.46
$103.20
Primary overhead extensions — Subdivision, Mobile Home Park, Multi-
Residence
$147.41
$176.95
$206.40
Primary overhead extensions — Commercial, Industrial
$294.83
$353.80
$383.28
Primary underground extensions — Commercial, Industrial
$294.83
$353.80
$383.28
Modifications of existing facilities
$147.41
$176.95
$206.40
Street lighting systems & Yard lights
$73.71
$88.46
$103.20
NOTE: The Zone Fee or Charge is non-refundable until the service is connected. If the service is constructed and
connected, the charge will be adjusted to the actual cost of engineering services.
City of Seward, Alaska 2024 Utilities Tariff
Legislative History Notes
City of Seward, Alaska
2024 Utilities Tariff
LEGISLATIVE HISTORY NOTES
GENERAL CHANGES
EFFECTIVE
Resolution 96-076
Amending The Utility And Harbor Tariffs By Revising
Interest Charges And Adding Other Fees Associated With
Delinquent Accounts.
June 10, 1996
Ordinance 00-014
Adopted rules & rate methodologies to
purchase power from qualifying facilities
June 12, 2000
Resolution 06-023
Authorizing The City Manager To Enter Into A New
Agreement For The Sale And Purchase Of Electric Power
And Energy With Chugach Electric Association,
Incorporated.
March 13, 2006
Chapter 3, Legislative History Notes Page 1
City of Seward, Alaska
2024 Utilities Tariff
ELECTRIC TARIFF
EFFECTIVE
Resolution 92-064
Adopted May 11, 1992
Resolution 92-186 (Page 2-3)
Amended November 16, 1992
Resolution 93-089
Amended June 18, 1993
Resolution 00-029
April 1, 2000
Resolution 00-053
Amended May 22, 2000
Ordinance 00-014
June 22, 2000
Resolution 02-138
January 1, 2003
No Resolution
*CEA Agr. adjusted demand rates
June 1, 2006
Resolution 09-115
Amending The Electric Rates And Charges Tariff To
Include Automatic Annual Adjustments To All Rates And
Fees By An Amount Equal To The Previous Five Full
Years' Average Increase In The Anchorage Consumer
Price Index For All Urban Consumers, And Automatic
Pass -Through Of Rate Increases From Chugach Electric
Association.
January 1, 2010 &
January 1, 2011
No Resolution
*CEA Agr. adjusted demand rates
May 1, 2011
No Resolution
*CEA Agr. adjusted demand rates
Resolution 11-081
Amending The Electric Rates And Charges Tariff To
Include Automatic Annual Adjustments To All Rates
And Fees By A Cumulative Amount Of Ten Percent In
2012 And Five Percent In 2013.
January 1, 2012 &
January 1, 2013
No Resolution
*CEA Agr. adjusted demand rates
August 31, 2012
No Resolution
*CEA Agr. adjusted demand rates
January 1, 2014
Resolution 2013-084
Adopting The Electric Enterprise Fund Biennial Budget
For Calendar Years 2014 And 2015.
January 1, 2014
Resolution 2014-047
Modifying The Electric Tariff To Add Language For
Net Metered Customers To Receive Compensation For
Producing Energy.
June 7, 2014
No Resolution
*CEA Agr. adjusted demand rates
July 31, 2014
No Resolution
Annual CPI increase 2.6%
January 1, 2015
No Resolution
*CEA Agr. adjusted demand and energy rates
May, 2015
Resolution 2015-089
Amending The Electric Rates And Charges,
Implementing Seasonal Rates And Freezing Small
General Service Rates For 2016 And 2017
October 26, 2015
No Resolution
Annual CPI increase 2.3%
January 1, 2016
No Resolution
*CEA Agr. adjusted demand rate
July 1, 2016
No Resolution
*CEA Agr. adjusted demand and energy rates
September 1, 2016
No Resolution
*CEA Agr. Adjusted demand rates
November 1, 2016
No Resolution
Annual CPI increase 2.4%
January 1, 2017
Resolution 2017-068
Amending The Electric Rates And Charges, Reducing
Seasonal Rates, And Adjusting Rates To Reflect Seward
Electric Utility Charge, Cost Of Power Adjustment And
Customer Charge For 2018 And 2019
January 15, 2018 &
January 15, 2019
*Council approved power agreement w'th CEA which adjusted the demand charge rate, but not by specific resolution.
Chapter 3, Legislative History Notes
Page 2
City of Seward, Alaska
2024 Utilities Tariff
WATER TARIFF
EFFECTIVE
Resolution 92-065
Adopted May 11, 1992
Resolution 92-113
Amended June 22, 1992
Resolution 93-090
Amended June 14, 1993
Resolution 93-142 (Fire
Hydrants)
Amended September 27, 1993
Resolution 95-032
Amended April 24, 1995
Resolution 99-048 (Ship
Water)
Amended April 26, 1999
Resolution 03-155
Amending The Water Tariff And The Sewer Tariff.
January 1, 2004
Resolution 04-106
Amending The Water Tariff.
January 1, 2005
Resolution 09-117
Amending The Water Tariff And Providing For Automatic
Annual Adjustments To All Rates And Fees By An Amount
Equal To The Five Previous Full Years' Average
Increase In The Anchorage Consumer Price Index For
All Urban Consumers.
January 1, 2010 &
January 1, 2011
Resolution 11-080
Amending The Water Tariff And Providing For A 4%
Increase In Calendar Year 2012 And 6% Increase In
Calendar Year 2013 And Providing For An Automatic
Annual Adjustment Thereafter To All Rates And Fees
By An Amount Equal To The Five Previous Full Years'
Average Increase In The Anchorage Consumer Price
Index For All Urban Consumers.
January 1, 2012 &
January 1, 2013
Resolution 13-085
Adopting The Water Enterprise Fund Biennial Budget
For Calendar Years 2014 And 2015.
January 1, 2014
Resolution 15-091
Amending The Water Tariff To Provide For A 4.3%
Increase In The 2016 Calendar Year And A 2.4%
Increase In The 2017 Calendar Year, And Allow For An
Automatic Annual Adjustment Thereafter To All Rates
And Fees By An Amount Equal To The Five Previous Full
Years' Average Increase In The Anchorage Consumer
Price Index For All Urban Consumers.
January 1, 2016 &
January 1, 2017
Resolution 2017-078
Amending The Water Tariff To Provide For A 2.1 %Rate
Increase, Clarifying Metered Versus Non -Metered,
Increasing Base Rate For 1 1/2" - 2" Meters, Changing
The Seasonal Definition, And Other Minor Housekeeping
Issues.
January 1, 2018
Resolution 2018-032
Amending The Water Tariff To Provide For A 2.1 %Rate
Increase Beginning January 15, 2018, Clarifying That
Metered Rates Apply To All Customers Other Than Non-
Commercial Residential, Changing The Seasonal
Definition, And Other Minor Housekeeping Changes.
Passed April 9, 2018
Retroactive to
January 15, 2018
Chapter 3, Legislative History Notes
Page 3
City of Seward, Alaska
2024 Utilities Tariff
SEWER/WASTEWATER TARIFF
EFFECTIVE
Resolution 92-066
Adopted May 11, 1992
Resolution 92-113
Amended June 22, 1992
Resolution 93-091
Amended June 14, 1993
Resolution 03-155
Amending The Water Tariff And The Sewer Tariff.
January 1, 2004
Resolution 04-105
Amending The Sewer Tariff.
January 1, 2005
Resolution 07-123 (5%C)
Amending The Sewer Tariff To Increase All Sewer Tariff
Charges By 5%, Effective January 1, 2008.
January 1, 2008
Resolution 09-118
Amending The Wastewater Tariff And Providing For
Automatic Annual Adjustments To All Rates And Fees
By An Amount Equal To The Five Previous Full Years'
Average Increase In The Anchorage Consumer Price
Index For All Urban Consumers.
January 1, 2010 &
January 1, 2011
Resolution 11-079
Amending The Wastewater Tariff And Providing For A
6% Increase In Calendar Year 2012 And A 6% Increase
In Calendar Year 2013 And Providing For An Automatic
Annual Adjustment Thereafter To All Rates And Fees By
An Amount Equal To The Five Previous Full Years'
Average Increase In The Anchorage Consumer Price
Index For All Urban Consumers.
January 1, 2012 &
January 1, 2013
Resolution 13-097
Amending The Wastewater Tariff By Upward Adjusting
All Rates And Fees By 5.2% Effective The First Billing
Cycle In January 2014.
January 1, 2014
Resolution 13-098
Amending The Wastewater Tariff By Upward Adjusting
All Rates And Fees By An Additional 5.2% Effective The
First Billing Cycle In January 2015.
January 1, 2015
Resolution 15-090
Amending The Sewer Tariff To Provide For A 4.3%
Increase In The 2016 Calendar YearAndA 4.4%
Increase In The 2017 Calendar Year, And Allow An
Automatic Annual Adjustment Thereafter To All Rates
And Fees By An Amount Equal To The Five Previous Full
Years' Average Increase In The Anchorage Consumer
Price Index (CPI) For All Urban Consumers.
January 1, 2016 &
January 1, 2017
Resolution 2017-077
Amending The Sewer Tariff To Provide For A 2.1 %
Rate Adjustment Beginning The First Billing Cycle Of
The 2018 Calendar Year, Adding A Seasonal Turn-
On/Turn-Off Fee, Clarifying That Metered Rates Apply
Only To Class D Customers, And Other Minor
Housekeeping Changes.
January 1, 2018
Resolution 2018-030
Amending The Sewer Tariff To Provide For A 2.1 %Rate
Adjustment Beginning January 15, 2018, Adding A
Seasonal Turn-On/Turn-Off Fee, Clarifying That Metered
Rates Apply To All Customers Other Than Non -
Commercial Residential, And Other Minor Housekeeping
Changes.
Retroactive to
January 15, 2018
Chapter 3, Legislative History Notes
Page 4